Refundable Credit

Filed Under »
Dictionary Says

Definition of 'Refundable Credit'

A tax credit that is not limited by the amount of an individual's tax liability. Typically a tax credit only reduces an individual's tax liability to zero. Refundable credits go beyond this and so really can be considered the same as a payment.
Investopedia Says

Investopedia explains 'Refundable Credit'

In other words, you'll still get the credit even if you don't owe any tax. The earned income credit is a good example of a refundable credit in the United States.

Related Definitions

  • Adoption Credit

    A federal tax credit that may be claimed by federal taxpayers who incur qualifying expenses, such as adoption fees, court costs, attorney fees and travel expenses, to adopt an eligible ...
    Read More »
  • Child Tax Credit

    A credit given to taxpayers for each dependent child that is under the age of 17 at the end of the tax year. The Child Tax credit is a nonrefundable credit that reduces the taxpayer's ...
    Read More »
  • Earned Income Credit - EIC

    A tax credit for low-income workers. Even workers whose incomes are too small to have paid taxes can get EIC.
    Read More »
    • Lifetime Learning Credit

      A federal initiative whereby a person is eligible for a non-refundable credit for a specific amount spent on higher education tuition and fees during the year.
      Read More »
    • Tax Credit

      An amount of money that a taxpayer is able to subtract from the amount of tax that they owe to the government. The value of a tax credit depends on what the credit is being provided for, ...
      Read More »
    • Additional Child Tax Credit

      A refundable credit that can be claimed by taxpayers who are ineligible to claim the full non-refundable child tax credit, because it exceeds their total tax liability. The additional ...
      Read More »
    • Section 1341 Credit

      A tax credit available for taxpayers who are repaid in a later year more than $3,000 in wages from a prior year. Section 1341 allows taxpayers to claim a credit for taxes paid on wages ...
      Read More »
    • Longtime Homebuyer Tax Credit

      The Longtime Homebuyer Tax Credit was a federal income tax credit available to homebuyers who had owned and lived in the same principal residence for five of the last eight years before ...
      Read More »

Articles Of Interest

Partner Links